Household Budget Series - Part 1, the £205,000 Household

Household Budget Series - Part 1, the £205,000 Household

Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
— Charles Dickens

Each and every one of us has a personal money journey.  Here at MoneyNotes, we’ll be producing a three part series to take a deeper look into how some of our MoneyNoters manage their different monthly budgets.

Part 1 – Introducing the “squeezed upper-middle?”

Can we ever forget that now famous Financial Times article that featured a family earning £200,000 yet commenting that they felt that they were “struggling”?  The piece certainly gave way to plenty of comments (the majority of which were as one might imagine rather void of sympathy.  When you consider that the UK’s current average disposable annual household income is £27,000, a household earning significantly more than this amount yet commenting that it wasn’t enough is quite difficult to believe. 

For the first interview in our series, we spoke with a household earning close to that magical £200k to get a second opinion, they have chosen to remain anonymous and for ease we will call them Jane and Chris:

1. Thanks for accepting to be interviewed, let’s start off with the top number, what is your combined household income? £205,000 per year.  Chris earns £150,000 and my income is about £55,000.

2. How many of you in your household? Four of us. Myself, Chris, our eldest is six years old and youngest is two and in nursery. 

3. Do you feel as a household you are comfortable? From a strictly financial point – yes. We feel fortunate to have the lifestyle our incomes are able to provide us. However, from a more emotional and personal point, we do sometimes worry.  Neither of us come from remotely wealthy or even comfortable backgrounds, and as such we always feel that we could be just one step away from job loss and consequently a big change to the lifestyle. On the plus side these feelings do motivate us to always think about ways to diversify our sources of income.

4. What does your household budget look like: See below 

The £205k Budget


Total Household Income per year


Monthly disposable Income


Monthly Expenses


£ 2,000.00

Council Tax

£ 150.00

Gas, Electricity and Water

£ 225.00

Connectivity - Phone, Digital TV, TV license and Broadband

£ 105.00

Cleaner - Once a week

£ 195.00

Food and Toiletries

£ 800.00

Sports Club - Family monthly subscription

£ 200.00

Savings set aside for holidays

£ 666.67

Mobile phones

£ 80.00

Eating out

£ 350.00

Monthly personal allowance for two

£ 600.00


£ 300.00


£ 100.00


£ 50.00

Life Insurance

£ 65.00

Car Insurance - Two cars

£ 133.33

Building and content insurance

£ 35.00

Nursery Fees

£ 1,500.00

Primary School Fees - Private school

£ 950.00

After school care

£ 758.33

Charitable giving

£ 120.00

Total Expense

£ 9,383.33

Buffer at the end of the month

£ 157.03

5. Wow, these look very comfortable, why the worry then? Like I said earlier, we feel fortunate but we have quite a few pinch points. Childcare and school fees being the major ones. Most people will argue that it is our choice to pay for private school fees.

6. Which part of your budget excites you the most: We have an annual budget of £8,000 to cover three holidays. One long haul, one short break outside UK and one staycation. The break from work and chance to spend some time together as a family as well as the opportunity to explore new places fascinate us. We dream about extended times off on holidays and can’t wait until that becomes a possibility.

7. What part of your budget do you loathe: Taxes! Well apart from taxes, we feel we should do more to get a better handle on a couple of things: Groceries and eating out. Also If family were nearby then we could save more on childcare in general but unfortunately this is not the case.

8. Have you made plans for pensions? We both contribute 7.5% of salaries to our pension and we both have employers that kindly match these. So yes about £31,000 go into our pension annually. It feels like a lot but the communication we get from the pension providers tells a different story as our pension savings equates to only a tiny fraction of our current earnings. So we definitely need to save more.

9. Do you allow yourselves the odd indulgence? Nothing exciting really, spa away-days and driving fast cars are our main indulgence.  We both have a bit of a thing for fast cars, but as tempting as it may be we never actually buy them.  We instead make do with driving experiences . Maybe one day when the kids are all grown up we might treat ourselves to a shiny new Aston Martin!

10. Finally what is your one money habit you would love to share with other MoneyNoters? A lot of people have one or two bank accounts where everything comes out of.  We used to do this but found it difficult to always keep track of all of our outgoings.  So we decided to make a change - now we have several bank accounts and set up standing orders to transfer money from our main account to the different accounts for holidays, school fees, child care and charity. This means that everything is truly accounted for and we always know where we stand financially. 

Coming up:

Part 2: The Jammers (Just about managing) £70k household income

Part 3: The £30k millennial


Household Budget Series - Part 2, The Jammers (Just about managing) £70,000 household income

Household Budget Series - Part 2, The Jammers (Just about managing) £70,000 household income

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